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I think these mass produced cars have to come down significantly.

What has happened to car loan rates in the last few months and what does that make on the monthly payment for the average buyer? I know with mortgage rates some homes have seen a 30% increase in the monthly payment due to rising ratesMost t buyers really only care about the monthly payment so if rates go up then value goes down.

And isn't it true that there is going to be a flood of new cars coming to market now that chips are no longer in short supply?

Again, I really don't follow this all that closely but I recall in 2009 when I was buying a boat I flew to Miami and basically just offered everyone half price until someone bit and it worked. Obviously this is not that extreme but I feel like people often underestimate the price swings between good and bad markets.

I can see used range rovers dropping by 30% or more.

My new lead candidate is a 2016 a4 alltrack. Can get those around 30k and then if market drops like I predict (with low confidence in my prediction skills) then I can sell it for 25 and get a range rover autobiography that now lists for 130k for 100k or less.

A. Most new cars are still suffering chip issues and will until at least first half of 2023.
B. as of now rates are being handled by substantially longer terms.
C.Flood of cars??? Most dealers ave devoid of inventory and most OEM's have stated the days of lots full resulting in $ discounts at dealers is over, at least that is the current model.
Ford has now stated EV's can now be ordered online. Used prices are going nowhere fast until OEM supply chain issues get resolved, far worse for Japanese OEM's.
I follow it very closely and my son works for CDK Global throughout entire Northeast. Dealers continue to pay stupid prices at auction to have inventory priced at even more stupid levels. In last few months, I had a modest warranty issue[ bad injector], dealer took me out of lease for a brand new, higher sticker, SUV, which they would have sold in an hour, now resulting in TWO transactions for them. They made 500-600 on new SUV and $6000 on my 1 year old, 10,000 mile used one. My new , higher sticker SUV.....same term, same exact payment.

This multi car shop which usually has 120-140 new cars, had 15 on the lot, most of those starter, lower cost options.
 
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A. Most new cars are still suffering chip issues and will until at least first half of 2023.
B. as of now rates are being handled by substantially longer terms.
C.Flood of cars??? Most dealers ave devoid of inventory and most OEM's have stated the days of lots full resulting in $ discounts at dealers is over, at least that is the current model.
Ford has now stated EV's can now be ordered online. Used prices are going nowhere fast until OEM supply chain issues get resolved, far worse for Japanese OEM's.
I follow it very closely and my son works for CDK Global throughout entire Northeast. Dealers continue to pay stupid prices at auction to have inventory priced at even more stupid levels. In last few months, I had a modest warranty issue[ bad injector], dealer took me out of lease for a brand new, higher sticker, SUV, which they would have sold in an hour, now resulting in TWO transactions for them. They made 500-600 on new SUV and $6000 on my 1 year old, 10,000 mile used one. My new , higher sticker SUV.....same term, same exact payment.

This multi car shop which usually has 120-140 new cars, had 15 on the lot, most of those starter, lower cost options.
This is the current situation in Europe too.
 

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In general the preowned market is correcting, but not super quickly and not to prepandemic levels yet. The 100k ADM is now 20k, for example.

This is separate to the still impending (but more quietly it seems) EV push causing people to want to buy at any cost the "last of the xxxx."
There will be a group of cars that never really go down in value, IMO. The special, low production stuff, but that has always been true I guess.
 

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In general the preowned market is correcting, but not super quickly and not to prepandemic levels yet. The 100k ADM is now 20k, for example.

This is separate to the still impending (but more quietly it seems) EV push causing people to want to buy at any cost the "last of the xxxx."
There will be a group of cars that never really go down in value, IMO. The special, low production stuff, but that has always been true I guess.
Good points. Regardless should see some slow corrections across the board, although less so for family SUV's and necessary cars.

Theres some good content on youtube that explains why prices have fallen the past month, and will continue to do so.
 

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I just hope that dude on here who said he was a working man but "invested" in bitcoin early can sell his R8 for what he paid or more. I think about that guy sometimes and really hope he didn't get crushed in the bitcoin winter or whatever they call it.

I have another friend who got rich off bitcoin as he used it years ago to buy drugs on the dark web and had some left over after he got sober that ballooned in value. He showed me how it worked once and it blew my mind (I'm over 40 and we used to buy our drugs from some sketchy dude at school). He downloaded some browser called Thor and then went to some sites where you could literally buy anything. It was like eBay for illegal stuff.
 

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He downloaded some browser called Thor and then went to some sites where you could literally buy anything. It was like eBay for illegal stuff.
Thor is a super-hero who throws a large hammer. Tor (The Onion Router) is the name of the browser you're looking for. :) Onion services, as they're called, can be thought of as simply unpublished Internet addresses that must be reached through the Tor network (and browser). The very short version: the Tor network allows for Internet traffic to be routed mostly anonymously (if used correctly), while publishers can choose to operate onion services that essentially operate as "dark web" sites. While the tech has been largely exploited by unsavory types for illegal purposes, it has plenty of very legal uses and even came courtesy of our government. But, rest assured, "common" criminals hoping to use Tor for illegal purposes usually screw up because they lack an understanding of Tor and its limitations... or just good hygiene in terms of usage. I won't go into the many ways this happens, but suffice it to say there's more than a few ways to burn yourself.

As for the car market... I think we'll see it soften just as we're seeing housing soften now. Will there be a major correction? Probably not under the current forecast. But, it's certainly possible if things take a wild turn in the larger economy. Some direct factors that will affect it clearly include the on-going chip supply, new car availability, and interest rates. Some more indirect factors will include spending priorities (energy and food prices vying for budget) and whether we see corporations tighten budgets more dramatically. Right now we're only seeing minor cracks in the foundation with delayed/slowed hiring and some limited layoffs (with some sector isolation like tech). But, I can say we're certainly seeing a lot of corporate belt tightening for 2H - even if layoffs aren't on the table (yet) - lots of focus on GP and optimizing 2H financials not to disappoint investors. We're seeing aspects of corporate travel tamped down again along with several categories of capex spending. Again, nothing crazy at the moment, but it feels like a "wait and see" approach for 3rd and 4th quarter. If things don't roughly meet revenue and GP expectations in 4th quarter, I think we'll see much more aggressive corporate cost control actions going into 1st quarter 2023... which will manifest as layoffs and clearly affect consumer spending (and the ~70% of the economy dependent upon it).

While the corporations clearly can lead us into a downturn by getting collectively nervous and over-tightening belts, I think most are "keeping their heads" at the moment. But the other area to watch will be the consumer. If you listen to someone like BoA, they'll tell you the consumer is in good shape - credit worthy, strong balances, still spending. Well, that's good news. But, there are other indicators that suggest the spending is increasingly debt-fueled - e.g., credit card debt dipped in 2020 but has since made a major comeback. Likewise, with the very substantial jump in housing prices, mortgage debt has also ballooned (along with the payments for those new owners). The last few years of stimulus checks have come and gone, as well, and without those freebies, consumers are not only carrying more debt to fuel the continued spending, but savings rates have slumped to 2008 - 2009 levels, suggesting more people are dipping into savings to continue their spending pace... and just generally putting a lot less aside. Again, I wouldn't call any of these numbers alarming... but they do paint a different picture... one of a consumer that's getting potentially tapped out.

What does it all mean? Well, look - you can't find a bunch of professional economists to agree, so take it for what it's worth - just my $0.02. People are notoriously bad at predicting changes in tide - they tend to just think the current trend goes on. But, I'd watch corporate earnings in the next two quarters carefully... as I said, they're keeping their heads for the moment, but that mood can change quickly, and tightening belts in the corporate world will translate quickly to poor consumer sentiment when layoffs start popping up. Likewise, I'd watch the consumer - they're growing weary from high housing, energy, and food prices - and even with decent wage gains, the spending rates aren't sustainable (as witnessed by rising debt and lower savings rates). Something will need to give. When? Who blinks first? That's a lot of guess-work and I'm not sure the juice is worth the squeeze in this case.

What to do? Don't buy a minivan at $10k over sticker. They'll lead the market down. Clearly there are other dynamics at play when you start talking about rare or collectible cars, and even a minor recession may not move that market much, while the minivan will be tanking. But, really, I can see slaving over the projections when it comes to making a 7-figure investment decision... but for a used car purchase? Just buy what you're going to buy and tune out the market. Go enjoy the car you want... if it was worth $0 the day after you bought it, what would really change in your life? Nothing.
 
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Yet another r8 not hitting reserve on Bring a trailer. This is like the fourth one the past 30d or so.
There have been 2 in the last month that didn’t sell, both were plain-spec rtronics. In the history of bat r8 sales, plain-spec rtronics have done notoriously poorly.
 
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There have been 2 in the last month that didn’t sell, both were plain-spec rtronics. In the history of bat r8 sales, plain-spec rtronics have done notoriously poorly.
I'm sure they tried to sell privately first before going to BAT though. This is not a BAT specific issue. Yes, plain-spec rtronics have done poorly in the past, but the issue of reserves not being met is across the board on cars there.

Doug has his own auction site and gives his analysis last month:
 

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I'm sure they tried to sell privately first before going to BAT though. This is not a BAT specific issue. Yes, plain-spec rtronics have done poorly in the past, but the issue of reserves not being met is across the board on cars there.

Doug has his own auction site and gives his analysis last month:
You specifically referenced BAT R8 listings, so that’s what I’m commenting on. The desirable spec cars are still hitting good numbers and selling. Not a lot of people shopping for rtronic cars, and that’s always been the case, so not exactly a market indicator.

There are some rare spec gated examples going up soon, they may be a better indicator.
 

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Certainly not a "trend" yet, but the Car Gurus sales data seems to suggest things have been dipping slightly since late June... not just for the R8, but here's the R8 chart nonetheless.

Rectangle Product Azure Slope Plot


Zooming out and looking at multiple years worth of data, across several varying brands (from low to high end) shows you how pronounced the situations is when compared against "normal" data from prior years. As I said earlier, people are notoriously bad at predicting TURNS in markets as they seem to instinctively believe things just continue in perpetuity because that's been a near-term trend.

If there's ever been an easy to spot asset bubble on a chart, here it is. Used car prices, in any normal economy, DON'T appreciate like this. You can see the very obvious issue in the past two years against a normal economy for the prior 10 years on the chart, going back to 2010. Now, the top three lines (Lamborghini, Ferrari, Aston Martin) may follow a different pattern coming down - as we've acknowledged, some of the factors driving those lines are related to enthusiasts and collectors snapping up "last of" cars... but inevitably, some of that appreciation is also due to the tried-and-true economics of shifting into hard assets in times of inflation. Wealthy people have done this forever, and this time is no different. I expect some of that value will "stick" but not all... especially once tides change, again, and people who are in these assets solely as investments shift gear.

In the lower section, you see some examples of "normal" brands (Ford, Chevy, Audi, Mercedes, Land Rover) best attributed to commuter cars and the like. Again, it's fair to say the bubble is clear as day on the chart. It WILL correct, I'm sure. These aren't special cars, and nobody is collecting Ford Escapes... yet, a number of these lines are up 40%+ in the last two years. Again, it's not a trend, but you can also start to see some plateauing and even slight dips at the tail of these lines. As I said earlier, with interest rates up several points from just the beginning of the year (the Fed is raising in 75 basis point increments!), inflation at over 9% y/y, energy and food prices spiking, and consumers dipping further into credit and savings... it's clear this can't persist. Money doesn't grow on trees at the end of the day. It eventually ends in "demand destruction" because people can't afford to pay these prices any longer. Yes, on the backs of COVID relief checks, savings from lack of travel and leisure spending for 1 to 2 years, and decent wage gains, there was fuel for this bubble - but I'm wagering the fuel is running out, folks.

Don't get me wrong - as I've said, lines like those on the top of the chart may follow a different path. People who are buying a garage full of exotics are not steered by the same forces impacting the single mom buying a used SUV. The price, alone, is not necessarily going to be the main driver here. However, as I said above, moving into hard assets is a defensive play against inflation. There's a decent chance we'll see July inflation numbers come down slightly (given the influence of lower oil, retail starting to turn over - Walmart, Target, Best Buy), and while I'm not expecting miracles, if we start to see a few months of this, I'd watch to see if investors start to move back into riskier assets.

Beyond the investor, even the enthusiast spending priorities will shift. We've seen this kick up in a big way with travel reaching pre-pandemic levels this summer - suddenly a well off family can travel to far-flung places again in 2022... airports have been mobbed. But this is classic sector rotation - the consumer doesn't suddenly have more money to spend, they're just shifting their priorities back to a more balanced lifestyle that will take some wind out of the sails for sectors that boomed under COVID lockdowns.

Just my $0.02. I don't have a crystal ball, and I don't know how much time we have left in this bubble - but I'd say it's safe to CALL it a bubble. If we have no major jolts to the economy, and we just see a slow grind down in inflation, maintaining strong jobs/employment, slow grind down in chips availability, etc., I could see this bubble slowly deflate but not give back its full gains. But, it's also possible that it pops much more quickly if any of the aforementioned takes a more dramatic/quicker turn.

Rectangle Slope Plot Font Parallel
 
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Yet another r8 not hitting reserve on Bring a trailer. This is like the fourth one the past 30d or so.
also interesting has been the decline in R8's on BaT in general recently. Here's #'s of R8 auctions last 10 months:
dec: 8
jan: 10
feb: 6
march: 10
april: 3
may: 10
june: 7
july: 2
august: 2

not sure whats going on there
 

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I'm sure they tried to sell privately first before going to BAT though. This is not a BAT specific issue. Yes, plain-spec rtronics have done poorly in the past, but the issue of reserves not being met is across the board on cars there.

Doug has his own auction site and gives his analysis last month:
not that i disagree with your general point but that moron is the last person to quote as a source for anything of value
 

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also interesting has been the decline in R8's on BaT in general recently. Here's #'s of R8 auctions last 10 months:
dec: 8
jan: 10
feb: 6
march: 10
april: 3
may: 10
june: 7
july: 2
august: 2

not sure whats going on there
people are keeping them because they realize they are the last of them. for example, mine will never be on bring a trailer.
 
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